Peloton’s Q4 Earnings and Strength Push Send Shares Soaring Over 30%

The connected fitness company says it’s bullish on strength as it continues to evolve beyond the Bike

Peloton says it’s planting seeds for growth as it continues its CEO search following Barry McCarthy’s exit , and while questions linger about the longevity of connected fitness, shares of PTON have risen over 30% as of Thursday afternoon signaling that the company may have begun to turn a corner.

The connected fitness company’s total revenue for Q4 was $643.6 million for the three months ending June 30 ($212.1 million of connected fitness products revenue and $431.4 million of subscription revenue), up from $642.1 million last year and outperforming its $618 – $643 million guidance range.

Peloton ended Q4 with 2.98 million paid connected fitness subscriptions, a net decrease of 75,000 in the quarter, and 615,000 paid app subscriptions, a net reduction of 59,000 in the quarter.

What’s Ahead for Peloton

For its FY25 outlook, Peloton expects hardware sales to decline and that its average net monthly paid connected fitness churn will continue to increase modestly, but the connected fitness company teased possible new strategies moving forward, such as adjustments in pricing and promotional strategies.

Revenue outlook for FY25 is now between $2.4 billion – $2.5 billion, below 2024’s $2.7 billion estimates.

“Our revenue outlook is tempered by uncertainty surrounding our ability to efficiently grow paid connected fitness and paid app subscribers, including an assumption that our investments in new initiatives will not deliver subscriber growth within the fiscal year, as well as an uncertain macroeconomic outlook,” a letter to shareholders read.

More Than a Bike Brand

Peloton acknowledged that while the fitness brand is best known for its signature Bike, the company is committed to growing its Tread business and investing in content offerings and product features that enhance the walking and running experience, co-CEO Chris Bruzzo told investors on Thursday’s earnings call. One recent Tread-related rollout was pace target running classes, offering personalized intensity levels.

Peloton is also looking to lean heavily into strength training and game-inspired workouts. Social features are also launching soon – ones that have been requested by devoted Pelotoners – such as private groups and challenges, which the company expects will drive member retention and organic acquisition over time.

“We have 16 modalities, but not everyone knows all the modalities we have,” interim co-CEO Karen Boone told investors. “We’re really excited about Tread — both selling more Treads but also the content, experiences, run club … and we’re really bullish on strength. I think there’s so much of a movement towards strength. I think people understand the science behind it and why it’s important. It is the number two modality for us, but I still think there’s a lot of people who come for the cardio and then understand the strength. We’re not yet known for strength.”

Recharging Connected Fitness

Over the summer, Peloton announced it would adjust its live class schedule at its New York City and London studios in order to focus on creating new content in the strength realm and indicated that it was eyeing other wellness verticals, such as sleep and nutrition.

The secondary market has also proven fruitful for Peloton, resulting in a steady stream of paid connected fitness subscribers (up 16% year-over-year in Q4). To that end, Peloton is rolling out a new, one-time equipment activation fee ($95 USD/$125 CAD) for those in the U.S. and Canada.

Following a pilot with the YMCA of Metropolitan Chicago (which places 100 Bike+ and Rows into 15 locations across the city ) the connected fitness company said there could be other gym-focused initiatives in the future.

As for the connected fitness segment – which is expected to experience softness in demand in the short-term – Peloton CFO Liz Coddington says the category could begin growing again within the next few quarters.

“Over the long term, we do still really remain bullish on the growth potential for the connected fitness category, and we expect to grow our share of total fitness and wellness spending, as we invest in product and content innovation and we evolve our marketing strategy,” she added.

Some strategies to enhance the member experience have already taken hold. Peloton just announced an integration with Amazon so members can read a Kindle book while working out on their Peloton Bike, Bike+, Tread or Tread+. The brand also recently teamed with FitBit for a global, multi-year content distribution partnership , widening its audience by giving Fitbit Premium users in the U.S., U.K., Canada and Australia access to Peloton fitness classes beginning in September.

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